Human cost of cheap clothing

The terrible fires last fall that killed almost 300 workers at the Ali Fashions factory in Pakistan and 112 at the Tazreen factory in Bangladesh remind us once again of the severe deficiencies of the current default model for securing decent conditions in the global apparel industry: voluntary corporate social compliance and auditing.

The global rag trade is an arena of ruthless competition at the base of the production pyramid — contract factories. This ferocious cost-cutting is not a natural force and its origin is not in the primitive scramble for contracts among Bangladeshi or other factory owners. The origin of the pressure that causes those owners to be so callous in the face of obvious safety issues is the prices the buyers are willing to pay. The pressure comes mainly from the top, not the bottom.

The low cost of Bangladeshi garments is procured not just through miserable wages, but by endangering the lives of workers. “Deadly Secrets,” a 60-page report released in December by the International Labor Rights Forum (to which I contributed some data and a method) examines “what companies know about dangerous workplaces and why exposing the truth can save workers’ lives in Bangladesh and beyond.” The study estimates more than 1,000 workers have been killed in apparel industry fires and related incidents since 1990; 700 of these deaths have occurred since 2006.

When we in the United States faced similar tragic occurrences, in particular the March 25, 1911, Triangle Factory Fire that took 146 lives, we struggled over the next generation to come to a value decision in our public policies: that saving lives was worth it, period.

We enforced industrywide rules (the Fair Labor Standards Act, for example, and state and local laws mandating sprinklers) and over time built a competent inspectorate. Global competition — the race to the bottom — has torn this edifice of decency to pieces since 1980. Along with our apparel jobs, we exported our fires.

Former Nieman Marcus buyer Sammy Lee told researchers Richard Appelbaum and Edna Bonacich that “pricing starts from the retailer and moves down. It doesn’t start from the bottom, from the real costs of making the garment. The retailer can always go down the street and find someone who can make it for less. The manufacturers and contractors are stuck. Everyone down the line is squeezed.”

The race to the bottom moves contracts from places where workers and allies have raised wages and conditions to places where they are worse. Bangladesh has the lowest garment worker wages in the world as it has surged into second place in the world garment export scramble — $20 billion in 2011, and about 6.8 billion pieces of clothing.

The business press has evinced interest in understanding “the costs of fire safety” in Bangladesh. The NGO community has been pressed to respond. In 1984, the survey of consumer expenditure data show the average U.S. household spent 6.2 percent of its income on apparel and related services; the middle fifth of households spent 7.2 percent. By 2011 that had dropped to 2.8 percent on average and 3.2 percent for households in the middle.

While it is possible to generate such a cost estimate, the context should be clear: American consumers are not suffering from the high prices of clothing. Over the last generation clothing costs have been dropping relative to incomes — by more than half.

In fact, any realistically imagined cost per garment of remediating dangerous conditions in Bangladesh is quite low. The country annually exports about $20 billion in garments and these are less than $3 per garment at wholesale. My rough estimate of electrical, building code and other remediation costs would bring the typically high-rise factories into reasonable safety compliance in a neighborhood of $2.5 billion, which would work out to a cost per garment of as little as seven cents — 2.5 percent of the export volume.

So here is a modest proposal:

The Bangladesh government would create a factory remediation fund, whose funds would flow mainly from up to a seven-cent tax on each exported garment, paid by the buyer. Part of the fund could come from U.S.-E.U. foreign aid contributions, which could support the expansion and training of an inspectorate to enforce internationally accepted safety and labor standards. The disbursement of funds would be subject to oversight by international experts agreed upon by the Bangladesh government and the participating nations.

Some big firms periodically express regret over the kinds of tragedies we have recently witnessed and talk about their dedication to improved conditions.

They could better serve their bottom lines and labor force by investing in safer and better worker conditions. Gamblers have the right phrase here: Put up or shut up.

Robert J.S. Ross is professor of sociology and director of the International Studies Stream at Clark University. Author of “Slaves to Fashion: Poverty and Abuse in the New Sweatshops,” he is a member of the board of directors of the Sweatfree Purchasing Consortium. His work is acknowledged in “Deadly Secrets,” a recent report by the International Labor Rights Forum.

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